BOSTON -- December 13 -- The Campaign for a Commercial-Free Childhood (CCFC) filed a complaint with the Federal Trade Commission (FTC) today, calling on the agency to investigate and bring an action against Ganz, owner of the popular children’s website Webkinz World (Webkinz.com). According to the complaint, the misrepresentations and omissions in Webkinz.com’s Ad Policy and Children’s Privacy Policy are deceptive, in violation of Section 5 of the Federal Trade Commission Act. CCFC also describes how Ganz flouts its obligations to protect children’s privacy online. Specifically, the complaint charges that:

Ganz’s Ad Policy claims parents can opt their children out of seeing third-party ads on Webkinz. But in direct contradiction to that claim, Ganz continues to expose children to third-party advertising even after parents opt out.

Ganz violates the Children’s Online Privacy Protection Rule (COPPA Rule) both by failing to link to its Children’s Privacy Policy from the Webkinz.com homepage, and because its Children’s Privacy Policy is vague, confusing and contradictory.

Ganz’s Children’s Privacy Policy is misleading because it states that the information collected at Webkinz.com cannot be used contact children online, when recent research strongly suggests that the data collected can be used to identify and contact a child.

“As the time children spend online increases, so does their vulnerability to privacy violations and to advertising,” said CCFC’s director Dr. Susan Linn. “It’s clear Ganz’s Ad and Privacy Policies are designed merely to assuage parents’ concerns, not actually to protect children. That’s why it’s essential that the FTC hold Ganz accountable for the company’s deceptive practices.”

Ganz, the ninth most popular children’s internet media company in the United States, has been operating Webkinz.com since 2005. Children enter Webkinz.com by purchasing a Webkinz toy that comes with a special code. Third-party ads first appeared on the site in 2007. When parents complained about the introduction of ads, Ganz adopted an Ad Policy expressly stating that parents could opt out of having their children view third-party advertisements. But opting out does not prevent children from being exposed to ads incorporated into Webkinz games such as “Wheel of Wow,” which, according to Ganz, attracts 4 million plays per month. Nor does opting out prevent Ganz from placing cookies on children’s computers, which are then used to track children's behavior to deliver targeted ads.

As the FTC seeks comment on its first proposed changes to the Children’s Online Privacy Protection Rule in ten years and as Congress contemplates new children’s privacy legislation, CCFC’s complaint highlights parents’ concerns about advertising and their children's privacy. “[I]f parents knew their children would still be shown ads after opting out and/or their children would be tracked for purposes of behavioral advertising, many would not allow their children to use the site,” CCFC explains in the complaint.

“Parents really want to supervise what their kids are doing online,” said Laura Moy of the Institute for Public Representation at Georgetown University Law Center, which is representing CCFC in its complaint. “But how can they do that effectively when companies won’t be honest about what they’re doing, let alone ask for parents’ permission? We need policymakers to step in and do something about this.”